The millions of homes that remain vacant are a stark reminder of the severity of the housing crisis that began in 2007. Through foreclosures, families downsizing and young people forgoing homeownership, the housing crisis has created a glut of empty homes.
For insurers, these vacant properties carry significant risks that differ in severity and frequency from those of an occupied home. But they also provide agents and brokers ample opportunities to build expertise and new business.
Vacant Property Insurance for Homeowners
That’s where vacant property insurance—and a savvy agent—comes in. Several different vacant property solutions are available, typically based on a DP-1 form. HO-3 policies often are called "all-risk" policies, because they cover all risks and perils unless otherwise specified in the policy. On the other hand, a DP-1 program functions on a named peril list, meaning it will only cover risks enumerated in the policy.
Carve Out a Vacant Property Niche
Those short-term vacant property policies have their own financial benefits for agents. Such policies often have a higher premium than the average homeowner’s insurance or dwelling policy, which means higher commissions.